One hundred and two basidiomycete strains (93 species in 41 genera) that prefer a soil environment were examined for screening of 1,1,1-trichloro-2,2-bis(4-chlorophenyl)ethane (DDT) biodegradation. Three strains within two litter-decomposing genera, Agrocybe and Marasmiellus, were selected for their DDT biotransformation capacity. Eight metabolites; 1,1-dichloro-2,2-bis(4-chlorophenyl)ethane (DDD), two monohydroxy-DDTs, monohydroxy-DDD, 2,2-dichloro-1,1-bis(4-chlorophenyl)ethanol, putative 2,2-bis(4-chlorophenyl)ethanol and two unidentified compounds were detected from the culture with Marasmiellus sp. TUFC10101. A P450 inhibitor, 1-ABT, inhibited the formation of monohydroxy-DDTs and monohydroxy-DDD from DDT and DDD, respectively. These results indicated that oxidative pathway which was catalyzed by P450 monooxygenase exist beside reductive dechlorination of DDT. Monohydroxylation of the aromatic rings of DDT (and DDD) by fungal P450 is reported here for the first time.